Balaji Amines MD, chairman, board of directors and AGM

Mutual fund votes, meeting of 23 Mar 2025, 11 fund houses

• Approval for providing Loan to Balaji Speciality Chemicals Limited, Subsidiary Company of the Company

  ›Against Axis Mutual Fund, HDFC Mutual Fund, Mirae Asset Mutual Fund, SBI Mutual Fund

  • Axis Mutual FundBalaji Speciality Chemicals Ltd (BSCL) is a 55% subsidiary of Balaji Amines Ltd (BAL). As per DRHP filled in August 2022, BAL holds 55% equity stake in BSCL, 42.98% is held by promoter and promoter group of BSCL and the remaining 2.02% equity stake is held by public shareholders in BSCL. Ande Pratap Reddy and Rajeshwar Reddy Nomula are common directors in BSCL and BAL and hold shares in BSCL. The company seeks shareholder approval to provide loans upto Rs. 2.0 bn to BSCL, a 55% subsidiary of BAL, in one or more tranches for BSCL’s business activities with terms and interest rate based on market conditions. As per the notice, BSCL has a capex plan of Rs 7.5 bn for the production of new specialty chemicals. However, the company has not disclosed the full terms of transactions including interest and repayment period. There is no clarity on whether the loan will be provided to the extent of the company’s shareholding in Balaji Speciality Chemicals Ltd. In the absence of clarity, we are unable to support the resolution.
  • HDFC Mutual FundThe company seeks shareholder approval to provide loans upto Rs. 2.0 bn to Balaji Speciality Chemicals Ltd, a 55% subsidiary of Balaji Amines Limited. However, the company has not disclosed the full terms of transactions including interest and repayment period. In the absence of clarity, we are unable to support the resolution.
  • Mirae Asset Mutual FundAs per advisory recommendation (passive holding)
  • SBI Mutual FundBalaji Speciality Chemicals Ltd (BSCL) is a 55% subsidiary of Balaji Amines Ltd (BAL). As per DRHP filled in August 2022, BAL holds 55% equity stake in BSCL, 42.98% is held by promoter and promoter group of BSCL and the remaining 2.02% equity stake is held by public shareholders in BSCL. Ande Pratap Reddy and Rajeshwar Reddy Nomula are common directors in BSCL and BAL and hold shares in BSCL.The company seeks shareholder approval to provide loans upto Rs. 2.0 bn to BSCL, a 55% subsidiary of BAL, in one or more tranches for BSCL’s business activities with terms and interest rate based on market conditions.As per the notice, BSCL has a capex plan of Rs 7.5 bn for the production of new specialty chemicals. However, the company has not disclosed the full terms of transactions including interest and repayment period. There is no clarity on whether the loan will be provided to the extent of the company’s shareholding in Balaji Speciality Chemicals Ltd. In the absence of clarity, we are unable to support the resolution.

  7 for4 against
• Approval of Material Related Party Transactions with Balaji Speciality Chemicals Limited, Material Subsidiary Company of the Company

  ›Against Axis Mutual Fund, HDFC Mutual Fund, Mirae Asset Mutual Fund, Nippon India Mutual Fund, SBI Mutual Fund

  • Axis Mutual FundBalaji Speciality Chemicals Ltd (BSCL) is a 55% subsidiary of Balaji Amines Ltd (BAL). BSCL manufactures products such as Ethylene Diamine (EDA), Piperazine Anhydrous (PIP), Di Ethylene Tri Amine (DETA), Amino Ethyl Ethanol Amines (AEEA) and Amino Ethyl Piperazine (AEP). As per DRHP filled in August 2022, BAL holds 55% equity stake in BSCL, 42.98% is held by promoter and promoter group of BSCL and the remaining 2.02% equity stake is held by public shareholders in BSCL. The company proposes to enter into related party transactions with BSCL for rendering or receiving financial support, such as availing a loan or providing a guarantee. While we recognize that BSCL has a capex plan of Rs. 7.5 bn and might need external capital, there is inconsistency between the resolution text and the explanatory notes. The resolution text states that the company seeks shareholders' approval for related party transactions to provide loans upto Rs. 2.0 bn to BSCL, whereas the explanatory notes state that the company proposes to enter into related party transactions for rendering or receiving financial support, such as availing of loan or giving guarantee, which is enabling. Further, the company has not disclosed the full terms of the transaction, including the interest rate, nor has it clarified whether the loan will be provided to the extent of the company’s shareholding in Balaji Speciality Chemicals Ltd. Given the inconsistency and lack of clarity on the transaction, we are unable to support the resolution.
  • HDFC Mutual FundThe company proposes to enter into related party transactions with BSCL for rendering or receiving financial support, such as availing a loan or providing a guarantee. The company has not disclosed the full terms of the transaction, including the interest rate. Given the lack of clarity on the transaction, we are unable to support the resolution.
  • Mirae Asset Mutual FundAs per advisory recommendation (passive holding)
  • Nippon India Mutual FundLack of Clarity
  • SBI Mutual FundBalaji Speciality Chemicals Ltd (BSCL) is a 55% subsidiary of Balaji Amines Ltd (BAL). BSCL manufactures products such as Ethylene Diamine (EDA), Piperazine Anhydrous (PIP), Di Ethylene Tri Amine (DETA), Amino Ethyl Ethanol Amines (AEEA) and Amino Ethyl Piperazine (AEP).As per DRHP filled in August 2022, BAL holds 55% equity stake in BSCL, 42.98% is held by promoter and promoter group of BSCL and the remaining 2.02% equity stake is held by public shareholders in BSCL.The company proposes to enter into related party transactions with BSCL for rendering or receiving financial support, such as availing a loan or providing a guarantee. While we recognize that BSCL has a capex plan of Rs. 7.5 bn and might need external capital, there is inconsistency between the resolution text and the explanatory notes. The resolution text states that the company seeks shareholders' approval for related party transactions to provide loans upto Rs. 2.0 bn to BSCL, whereas the explanatory notes state that the company proposes to enter into related party transactions for rendering or receiving financial support, such as availing of loan or giving guarantee, which is enabling.Further, the company has not disclosed the full terms of the transaction, including the interest rate, nor has it clarified whether the loan will be provided to the extent of the company’s shareholding in Balaji Speciality Chemicals Ltd. Given the inconsistency and lack of clarity on the transaction, we are unable to support the resolution.

  6 for5 against

Mutual fund votes, meeting of 11 Jul 2024, 10 fund houses

• To receive, consider and adopt the Audited Financial Statements including Audited Consolidated Financial Statements of the Company for the Financial Year ended 31st March, 2024 and the Reports of the Board of Directors and Auditors thereon.MoreLess

  10 for0 against
• To declare dividend of Rs.11 per Equity Share for the Financial Year 2023-24.

  10 for0 against
• To appoint a Director in place of Mr. Dundurapu Ram Reddy (DIN: 00003864), who retires by rotation and being eligible, offers himself for re-appointment.

  10 for0 against
• Ratification of Remuneration to Cost Auditors for the Financial Year 2024-25

  10 for0 against

Mutual fund votes, meeting of 10 Jul 2023, 8 fund houses

Each resolution counts the houses whose vote was matched to it; the rest are listed last.

• To receive, consider and adopt the Audited Financial Statements, including Audited Consolidated Financial Statements of the Company for the Financial Year ended 31st March, 2023 and the Report of the Board of Directors and Auditors thereon.MoreLess

  8 for0 against
• To declare dividend of Rs.10 Per Equity Share for the Financial Year 2022-23.

  8 for0 against
• To appoint a Director in place of Mr. Ande Srinivas Reddy (DIN: 03169721), who retires by rotation and being eligible, offers himself for re-appointment.

  ›Against Axis Mutual Fund, Nippon India Mutual Fund, SBI Mutual Fund

  • Axis Mutual Fund, SBI Mutual FundA. Srinivas Reddy, 48, is the Whole-time Director and CFO of the company and part of the promoter family. He has been on the board of the company since 2013. He has attended all board meetings held in FY23. He retires by rotation. We do not support his reappointment because we believe four promoter executive directors on the board of the company and one executive director on the subsidiary (Balaji Speciality Chemicals Limited) is excessive for the size of the business. Further, aggregate promoter remuneration for FY23 is high at Rs. 338.1 mn (5.9% of consolidated PAT and 39.6% of consolidated employee benefit expenses). A. Srinivas Reddy was appointed as CFO of the listed company in May 2023: it is unclear if he has the experience to be the CFO of a listed company.
  • Nippon India Mutual FundFour promoter executive directors on the board of the company

  5 for3 against
• Ratification of Remuneration to Cost Auditors for the Financial Year 2023-24.

  8 for0 against
• To consider the appointment of Dr. Suhasini Yatin Shah (DIN: 02168705) as an Independent Director of the Company.

  8 for0 against
• To consider the appointment of Dr. Uma Rajiv Pradhan (DIN: 10096017) as an Independent Director of the Company.

  8 for0 against
• To consider the appointment of Mr. Mohan Kumar Ramakrishna (DIN: 10168247) as an Independent Director of the Company.

  8 for0 against
• To consider the appointment of Mr. Adabala Seshagiri Rao (DIN: 09608973) as an Independent Director of the Company.

  8 for0 against
• To consider and approve revision of the terms and conditions of remuneration payable to Mr. Ande Prathap Reddy (DIN: 00003967), Executive Chairman of the Company.

  ›Against Axis Mutual Fund, HDFC Mutual Fund, Kotak Mahindra Mutual Fund, Motilal Oswal Mutual Fund, Nippon India Mutual Fund, SBI Mutual Fund

  • Axis Mutual FundWe estimate Ande Prathap Reddy’s FY24 remuneration to be Rs. 142.0 mn. We note that his pay is commission driven. Notwithstanding, he has been receiving commissions at ~3% of standalone PBT, which is high. We raise concerns regarding the proposed remuneration structure since his commission component is being increased to upto 4% of net profits: this could increase his commission payout even if the company’s profits decline. Further, the aggregate promoter family remuneration was 5.9% of FY23 consolidated PBT and 39.6% of FY23 consolidated employee benefit expenses, which is high. The Executive Remuneration of the company is higher compared to peers and not commensurate with the size of the business. The company must consider putting an absolute cap on the commission payable to him and disclose the performance metrics used for the variable pay
  • HDFC Mutual FundThe proposed remuneration is high considering the size and complexity of the business
  • Kotak Mahindra Mutual FundExecutive Remuneration of the company is higher compared to peers and not commensurate with the size of the business. The company must consider putting an absolute cap on the commission payable to him and disclose the performance metrics used for the variable pay. Hence voting against.
  • Motilal Oswal Mutual FundCompliant with law. Governance Concern: Holding position of Executive Chairman. No absolute cap on variable pay. Unfair past remuneration practice of the Company.
  • Nippon India Mutual FundNo absolute cap on variable pay
  • SBI Mutual FundWe estimate Ande Prathap Reddy’s FY24 remuneration to be Rs. 142.0 mn. We note that his pay is commission driven. Notwithstanding, he has been receiving commissions at ~3% of standalone PBT, which is high. We raise concerns regarding the proposed remuneration structure since his commission component is being increased to upto 4% of net profits: this could increase his commission payout even if the company’s profits decline. Further, the aggregate promoter family remuneration was 5.9% of FY23 consolidated PBT and 39.6% of FY23 consolidated employee benefit expenses, which is high. The Executive Remuneration of the company is higher compared to peers and not commensurate with the size of the business. The company must consider putting an absolute cap on the commission payable to him and disclose the performance metrics used for the variable pay.

  2 for6 against
• To consider and approve revision of the terms and conditions of remuneration payable to Mr. Dundurapu Ram Reddy (DIN: 00003864), Managing Director of the Company.

  ›Against Axis Mutual Fund, HDFC Mutual Fund, Kotak Mahindra Mutual Fund, Motilal Oswal Mutual Fund, Nippon India Mutual Fund, SBI Mutual Fund

  • Axis Mutual FundWe estimate D Ram Reddy’s FY24 remuneration to be Rs. 107.6 mn. We note that his pay is commission driven. Notwithstanding, he has been receiving commissions at ~2% of standalone PBT, which is high. We raise concerns regarding the proposed remuneration structure since his commission component is being increased to upto 3% of net profits: this could increase his commission payout even if the company’s profits decline. Further, the aggregate promoter family remuneration was 5.9% of FY23 consolidated PBT and 39.6% of FY23 consolidated employee benefit expenses, which is high. The Executive Remuneration of the company is higher compared to peers and not commensurate with the size of the business. The company must consider putting an absolute cap on the commission payable to him and disclose the performance metrics used for the variable pay
  • HDFC Mutual FundThe proposed remuneration is high considering the size and complexity of the business
  • Kotak Mahindra Mutual FundExecutive Remuneration of the company is higher compared to peers and not commensurate with the size of the business. The company must consider putting an absolute cap on the commission payable to him and disclose the performance metrics used for the variable pay. Hence voting against.
  • Motilal Oswal Mutual FundCompliant with law. Governance Concern: No absolute cap on variable pay. Unfair past remuneration practice.
  • Nippon India Mutual FundNo absolute cap on variable pay
  • SBI Mutual FundWe estimate D Ram Reddy’s FY24 remuneration to be Rs. 107.6 mn. We note that his pay is commission driven. Notwithstanding, he has been receiving commissions at ~2% of standalone PBT, which is high. We raise concerns regarding the proposed remuneration structure since his commission component is being increased to upto 3% of net profits: this could increase his commission payout even if the company’s profits decline. Further, the aggregate promoter family remuneration was 5.9% of FY23 consolidated PBT and 39.6% of FY23 consolidated employee benefit expenses, which is high. The Executive Remuneration of the company is higher compared to peers and not commensurate with the size of the business. The company must consider putting an absolute cap on the commission payable to him and disclose the performance metrics used for the variable pay.

  2 for6 against
• To consider and approve the revision of terms of appointment of Mr. Rajeshwar Reddy Nomula (DIN: 00003854) and re-designated as Whole-time Director of the Company.

  2 for0 against
• To consider and approve the revision of terms of appointment of Mr. Ande Srinivas Reddy (DIN: 03169721) and re-designated as Whole-time Director and CFO of the Company.

  ›Against SBI Mutual Fund

  • SBI Mutual FundA. Srinivas Reddy was appointed as CFO of the listed company in May 2023: it is unclear if he has the experience to be the CFO of a listed company. We estimate A. Srinivas Reddy’s FY24 remuneration to be Rs. 106.9 mn. We note that his pay is commission driven. Notwithstanding, he has been receiving commissions at ~2% of standalone PBT, which is high. We raise concerns regarding the proposed remuneration structure since his commission component is being increased to upto 3% of net profits: this could increase his commission payout even if the company’s profits decline. Further, the aggregate promoter family remuneration was 5.9% of FY23 consolidated PBT and 39.6% of FY23 consolidated employee benefit expenses, which is high. The Executive Remuneration of the company is higher compared to peers and not commensurate with the size of the business. The company must consider putting an absolute cap on the commission payable to him and disclose the performance metrics used for the variable pay.

  1 for1 against

Mutual fund votes, meeting of 29 Jun 2022, 5 fund houses

Each resolution counts the houses whose vote was matched to it; the rest are listed last.

• To receive, consider and adopt the Audited Financial Statements, including Audited Consolidated Financial Statements of the Company for the Financial Year ended 31st March, 2022 and the Reports of the Board of Directors and Auditors thereon.MoreLess

  ›Against Axis Mutual Fund

  • Axis Mutual FundOur decision on this resolution is driven by our reliance on auditors. We raise concerns over the quality of audit conducted since the statutory auditor, Ayyadevara & Co. is a Hyderabad-based sole proprietorship and may not have the requisite scale to audit a company of this size.

  4 for1 against
• To declare dividend of Rs. 6 per Equity Share for the Financial Year 2021-22.

  5 for0 against
• To appoint a Director in place of Mr. N. Rajeshwar Reddy (DIN: 00003854), who retires by rotation and, being eligible, offers himself for re-appointment.

  ›Against Axis Mutual Fund

  • Axis Mutual FundN. Rajeshwar Reddy, 67, is the Joint Managing Director of the company and part of the promoter family. He has been on the board of the company since 16 November 1988. He has attended all five board meetings held in FY22. He retires by rotation. We do not support his reappointment because we believe five executive promoter directors on the board is excessive for this size of business. Additionally, aggregate promoter family remuneration (about 8% of FY22 consolidated pre-tax profits) is also high. We raise concern that two of the three members of the Nomination and Remuneration Committee are tenured Independent Directors.

  4 for1 against
• To appoint Statutory Auditors of the Company.

  5 for0 against
• Ratification of Remuneration to Cost Auditors.

  ›Against Nippon India Mutual Fund

  • Nippon India Mutual FundLow audit fees

  3 for1 against
• Ratification of Remuneration to Cost Auditors for the Financial Year 2022-23.

  ›Against Nippon India Mutual Fund

  • Nippon India Mutual FundLow audit fees

  3 for1 against

Mutual fund votes, meeting of 9 Aug 2021, 3 fund houses

• To receive, consider and adopt the Audited Financial Statement, including Audited Consolidated Financial Statement of thenCompany for the Financial Year ended 31st March, 2021 and the Reports of the Board of Directors and Auditors thereonMoreLess

  3 for0 against
• To confirm the payment of Dividend on Equity Shares and declaration of Final Dividend on Equity Shares for the FinancialnYear 2020-21.n

  3 for0 against
• To appoint a Director in place of Mr. D. Ram Reddy (DIN: 00003864), who retires by rotation and, being eligible, offers himself for re-appointment.

  3 for0 against
• Ratification of Remuneration to Cost Auditors for the Financial Year ending 31st March, 2022

  3 for0 against
• Re-appointment of Mr. A. Prathap Reddy as Executive Chairman

  ›Against Nippon India Mutual Fund

  • Nippon India Mutual FundNo absolute cap on remuneration

  2 for1 against
• Re-appointment of Mr. D. Ram Reddy as Managing Director

  ›Against Nippon India Mutual Fund

  • Nippon India Mutual FundNo absolute cap on remuneration

  2 for1 against
• Re-appointment of Mr. N. Rajeshwar Reddy as Joint Managing Director

  ›Against Nippon India Mutual Fund

  • Nippon India Mutual FundNo absolute cap on remuneration

  2 for1 against
• Re-appointment of Mr. G. Hemanth Reddy as Whole time Director & CFO

  ›Against Nippon India Mutual Fund

  • Nippon India Mutual FundNo absolute cap on remuneration

  2 for1 against
• Re-appointment of Mr. A. Srinivas Reddy as Whole time Director

  ›Against Nippon India Mutual Fund

  • Nippon India Mutual FundNo absolute cap on remuneration

  2 for1 against